impact of macro economic factors on auto industry
TRANSCRIPT
Study of Macro Economic Factors affecting “Indian Auto Industry”
Prepared by Sanjiv Narula . 06 Feb 2016
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Indian Auto Industry- Among Top 10 in World
Source SIAM
Annual Sales 23,960,940 vehicles
Contribute to
7.1 % of the country's GDP , 49% of Mfg GDP , 26% of Industry GDP
4.3% of overall exports
Employment of 19 million
Generate Revenues of Rs 2.34 Lakh crore
Attracted FDI worth US$ 13.48 billion (April 2000 to June 2015)
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Macro Economic Factors affecting Indian Auto Industry
Indian Auto Industry
Interest Rates
Rising Income Level & Demography
Urbanization
Raw Material Prices
USD Fluctuation
Global Environment(China
Meltdown)
Factors Evaluated
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FY 14-15 FY 15-16 Outlook FY 16
-8
-6
-4
-2
0
2
4
6
8% Growth
Car Motorcycle
Interest Rates and Petrol Prices and Auto Sector
Interest Rates reduced from 10.1 % to 9.70 % and expected to dropEncourages spending on investment Increase the Quantity of goods (Automobile ) Purchased
Global crude prices have fallen Cheaper fuel brings down running costs. Lower running costs imply low cost of ownership. Lower cost of ownership drives sales. Cars become more affordable to run. Also, cheaper fuel implies other commodities are cheaper and disposable
income increases
The Interest Rate Effect
The Wealth Effect
Source SIAM
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Demography Indian Pockets growing Deeper
Source India’s macro-economic outlook 2020
15-19 age band (one tenth of the population) will be a significant segment
Almost half of the population will continue to remain in the age band of 15—44 in the next decade.
2000 2005 2015 2020
Indian Car Buyer Getting Younger Favourable Demographics will boost Auto Sector Growth
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Passenger car penetration
Still Lot of scope of Growth in Indian Car Market 5
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Auto Sector Growth by Women
Scoter Market will witness High Growth due to High demand by Women
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Urbanization Trend of India
Bigger the city, longer the distances per trip Opportunities for Personal vehicles where public transport is inadequate
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13.8617.29 17.29 19.91
23.34 25.72 27.7833.00 36.00
43.00 46.00
10.84 11.9911.1810.29
0
20
40
60
80
100
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2010 2015 2025 2030
Urbanization and Auto Sector Growth
Bigger the city, longer the distances per trip Longer Distance Trip drives need of Transportation Opportunities for Personal vehicles where public transport is inadequate
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Indian Metro Rail rides on Hero MotoCorpNew Delhi: Jaipal Reddy has hailed Hero Moto Limited for introducing special bike service which would provide last mile transportation solution for Metro rail commuters.
“Metro feeder system buses and autos are inadequate and do not provide the last mile solution to people. But this bike service would be revolutionary in meeting this gap.” said Jaipal Reddy.
Rampant urbanisation, migration of people and cross movement to downtown areas has put a lot of pressure on already choking infrastructure.
These bikes are parked at the station, any person with the UID (Unique identity) that verifies license and mobile commerce account can take the bike and reach his destination. GPS tracker in the bike would let the logistics company to get the bike back to the nearest parking bay which are located all across the city. 8
Focus on the journey, not the destination.
Joy is found not in finishing an activity
but in doing it
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Seeking for your valuable Inputs